The simple definition of “religious employer” for purposes of the exemption would follow a section of the Internal Revenue Code, and would primarily include churches, other houses of worship, and their affiliated organizations...

This proposed change is intended to clarify that a house of worship would not be excluded from the exemption because, for example, it provides charitable social services to persons of different religious faiths or employs persons of different religious faiths.

This NPRM is super-complicated, especially in relation to provisions for self-insured religious employers, but clearly allows Catholic Healthcare organizations to meet the definition of religious employer.